Federal Reserve Bank of Richmond President Jeffrey Lacker on Thursday said uncertainty over U.S. fiscal policy is holding back business investment and hiring, though he expects “meaningful progress” on budget issues now that the election is over.

“It will not be enough to simply sidestep the fiscal cliff,” Mr. Lacker said in remarks prepared for an economic outlook conference. “To meaningfully reduce the uncertainty about tax and spending policy that is discouraging private sector commitments, we will have to see convincing progress toward a sustainable long-run trajectory for federal policy.”

The so-called fiscal cliff is a mix of large tax increases and across-the-board spending cuts that begin in January unless lawmakers intervene.

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